Over the past decade, Pakistan's 23 state-owned enterprises
(SOEs) have accumulated a staggering loss of Rs 5.5 trillion (approximately
$5.19 billion), with the national airline, Pakistan International Airlines
(PIA), alone accounting for a loss of Rs 700 billion. These alarming figures,
shared by Prime Minister’s Advisor on Privatization Affairs, Muhammad Ali,
during a National Assembly Standing Committee on Privatization meeting,
underscore the persistent inefficiency and mismanagement within the government
sector. This situation has reignited the debate surrounding the urgent need for
privatization and greater accountability within the state-run sectors.
Financial Crisis in State-Owned
Enterprises
The revelations presented during the meeting have cast a
spotlight on the financial woes plaguing Pakistan’s SOEs. Muhammad Ali
emphasized that this ongoing financial crisis is unsustainable and places an
undue burden on taxpayers. The combined losses of these enterprises have
drained substantial national resources, yet the structural inefficiencies and
lack of accountability continue to hinder progress.
One of the most concerning examples highlighted was PIA’s
colossal loss, which remains one of the biggest contributors to the financial
strain on the national exchequer. The continued losses of PIA, alongside those
of other state-run enterprises, raise critical questions about the viability
and management of government-owned entities in Pakistan.
Utility Stores and Employment Crisis: A
Broader Issue
In addition to the significant losses in other sectors, the
country’s utility stores, which serve as an essential resource for many
citizens, are also facing severe financial difficulties. During the same
meeting, it was revealed that approximately 1,000 utility stores are slated to
close within the month, leading to the layoff of hundreds of employees. This
adds to the growing concern over job security, particularly within the public
sector.
Out of the current 5,500 utility stores, only 1,500 will
remain operational, with plans to privatize the more financially stable stores.
This decision has sparked concerns regarding the welfare of employees who are
directly impacted by these closures. Farooq Sattar, a member of the National
Assembly and the chair of the meeting, stressed that the government has a
responsibility to ensure job security and protect the rights of those affected
by these measures.
The Privatization Debate: A Path
Forward
The ongoing restructuring and privatization efforts have
further highlighted the need for a strategic overhaul of Pakistan’s loss-making
enterprises. The committee was informed that despite a subsidy of Rs 38 billion
provided to the utility stores last financial year, the stores still faced
significant challenges. This year, the allocated Rs 60 billion for utility
stores has not been provided, exacerbating the financial strain.
The situation in the power sector, with three loss-making
power distribution companies—SEPCO, HESCO, and PESCO—has also drawn attention.
Power Division officials informed the committee that consultations are underway
with the World Bank to explore privatization options for these companies. The
aim is to bring about greater efficiency and reduce the financial burden on the
state.
Conclusion: The Need for Reform and
Accountability
The discussion in the National Assembly’s Standing Committee
on Privatization underscores the critical need for structural reforms and
privatization within Pakistan’s state-owned enterprises. With mounting
financial losses, inefficiency, and an increasing burden on taxpayers, the call
for accountability and privatization has never been more urgent. As the
government looks to restructure and privatize its loss-making entities, it is
crucial that employee rights and job security remain a priority. The future of
Pakistan’s SOEs hinges on effective management, transparency, and a long-term
strategy to revitalize these crucial sectors.
Source: Jang News
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